Bitfinex Vs. New York AG Case: $850 Million Lost? Here are the Facts and Updates

By Nivesh Rustgi
Published April 26, 2019 Updated April 26, 2019
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Bitfinex Vs. New York AG Case: $850 Million Lost? Here are the Facts and Updates

By Nivesh Rustgi
Published April 26, 2019 Updated April 26, 2019

Bitfinex has responded to the claims of the Attorney-General of New York who accused the Exchange of covering up “missing funds” to the tune of $850 million.

In the statement, AG Letitia James mentioned that the firm had transferred $850 million to a Panamanian firm, Crypto Capital Corp. Furthermore, she also said that Crypto Capital had apparently lost all the funds.

The New York AG accused Bitfinex of allegedly giving itself arbitrary access to $900 million worth of TUSD without any formal custody arrangement or deposit to cover $850 million lost at the firm.

Attorney General’s Claims

Attorney-General (AG) of New York, Letitia James, specifically accused the firm of covering up to $625 million, transferred out of tethers bank accounts to an unknown account. AG mentioned that these funds never made it to the designated deposit arrangements, but were done to cover up the $850 million lost at Crypto Capital.

According to the AG, Crypto Capital had refused or was unable to process withdrawals during Q2 of 2018. The New York AG mentioned that executives

“fraudulently shifted most or all of Bitfinex’s risk of loss of several hundred million dollars onto Tether’s balance sheet, but continued to represent to the market that Tethers were fully ‘backed’ by U.S. dollars sitting safely in a bank account. They were not.”

Bifinex’s Stand

However, Bitfinex Exchange responded almost immediately in the blog post saying that the Attorney General’s court filings are written: “in bad faith and are riddled with false assertions.

According to Bitfinex, the amounts at Crypto Capital have not been lost but have been “seized and safeguarded.” While the Exchange did not mention where or who seized the firm, they reassured its customers that “we are and have been actively working to exercise our rights and remedies and get those funds released.

Moreover, it also mentioned that Bitfiex and Tether are both independent, regulated firms that are operating completely within their rights. He also mentioned that both the firms have been cooperative with the Attorney General’s Office in New York. In a strong note the firm mentioned that:

“…Bitfinex and Tether are committed to fighting this gross overreach by the New York Attorney General’s office against companies that are good corporate citizens and strong supporters of law enforcement. Bitfinex and Tether will vigorously challenge this, and any and all other actions, by the New York Attorney General’s office.”

The case was brought up in Justice Debra James’ Court, who prohibited the Exchange from committing any more violations of law and order at its Exchange. It also ordered the Exchange to retain every document related to the matter.

Bitfinex Moves Large Amounts of Funds. Is it Another Cover-up?

In a new revelation in the crypto-sphere, Bitfinex has allegedly moved $89 million worth of Bitcoins from its cold wallet. Moreover, it also moved Ethereum (ETH) worth $96 million as revealed by sources. Therefore, a total of $185 million in cryptocurrencies has been moved from the cold storage wallets of Bitfinex.

A movement of such large volume just after the accusations does not create a positive image of the firm. Another Twitter user and popular trading analyst, Jacob canfield tweeted:

“Looks like the #tether fud is having a massive impact on #Bitfinex already. Over 650,000 Ether have already moved off of the exchange. RIP trading volume. If this continues, I doubt they will be able to pay back that ‘loan.’”

Also Read: Crypto-Market Update: Bitcoin [BTC] Drops Below $5k; Altcoin, ETH, XRP, and XMR Traders Panic on Bitfinex News

While the matter is still unclear and only further court proceedings will confirm the facts, the Bitcoin and cryptocurrency markets are still in carrying the FUD from the suspicions of USDT actually being used illicitly by Bitfiniex.

Do you have any evidence or views to add on the issue? Please share them with us. 


The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Nivesh Rustgi
1181 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)